GM retirees reach deal with company

Group sought return of benefits cut in 2008

General Motors Canada

DURHAM -- A group of about 3,200 salaried retirees has reached a settlement with General Motors after the company cut their benefits while it was undergoing restructuring during the 2008 economic downturn.

GENMO, the group of former salaried and executive employees who retired between Jan. 1, 1995 and Oct. 20, 2011, filed a class-action lawsuit in May 2010 against General Motors of Canada.

Jan O’Neill’s husband Joe retired from his job as a power train manager at the truck plant in 2002 and helped form the organization when GM began to cut benefits.

In 2008, GM was facing significant financial challenges and reduced the benefits in a cost-cutting action. The company wanted to reduce the life insurance payout someone would receive to $20,000, Mrs. O’Neill said

“They reduced it across the board. Everybody’s was decreased. It was an arbitrary decision to reduce it.”

That’s when Mr. ONeill decided to fight back.

“Joe started the whole process. There was a letter-writing campaign,” Mrs. O’Neill said, adding the organization now has a membership of about 3,200.

Mr. O’Neill died in May 2012 and he was replaced by Lynn McCullough as the plaintiff for the class action lawsuit.

With membership dues, the group was able to hire lawyers.

“That’s where we got the money to pursue a class action,” Mrs. O’Neill said.

The group’s lawyers, the firm of Sack Goldblatt Mitchell, recommended a class action route, using a summary judgment process, she noted. That process meant witnesses weren’t called, making it a “document-based case.”

The case was heard in court in May of last year and “we won most of our claims. GM appealed and we counter-appealed.”

The company then approached GENMO about negotiating a settlement and an agreement was reached in principle in June. On Aug. 7, the settlement was ratified by the courts.

“We got back our benefits we had lost, with the exception of a couple of things,” Mrs. O’Neill said.

In the court case, GM argued it had “the ability to reduce it unilaterally.”

Mrs. O’Neill is “exceptionally” pleased with the outcome.

“We didn’t get it all back, but we created a formula to get most of it back,” she said. “Life insurance, that’s the significant one. There were other cuts, but life insurance was the significant one.”

Under the agreement, a surviving spouse would receive $20,000 life insurance payout and two-thirds of the remainder of what they would have received. For instance, someone who would have received an $80,000 payout would receive $20,000 and two-thirds of the remaining $60,000, or $40,000. So, they would receive a $60,000 payout.

“We want to continue to support GM. We want GM to be in business for a long time,” Mrs. O’Neill said. “They provided us with a good life.”

In a prepared statement, Adria MacKenzie, corporate communications manager for GM Canada, said, “We are pleased that we have reached an amicable resolution with our salaried retirees that closes this chapter of our recent history. We are moving forward, focused on building the best cars and trucks for our customers.”